Union Finance Minister Nirmala Sitharaman released the interim budget of the Modi 2.0 administration on 1st February 2024. The ruling Bharatiya Janata Party (BJP) of Prime Minister Narendra Modi is reportedly utilizing the interim budget for 2024–2025 as their economic platform ahead of the 2024 Lok Sabha election.
An essential component of India’s economic growth toward a $5 trillion GDP is the MSME sector. In her speech presenting the interim budget 2024 to the Parliament, Finance Minister Nirmala Sitharaman emphasized the significance of having sufficient funding.
Sitharaman said that the government wants to ensure timely and adequate finances, relevant technologies, and appropriate training for the micro, small, and medium enterprises (MSME)
Key Highlights for MSMEs in Budget 2024
Nirmala Sitharaman focused on the Micro, Small, and Medium Enterprises (MSME) sector, which makes up about 30% of India’s GDP, in her interim MSME Budget 2024 statement.
She emphasized the government’s focus on MSMEs under the banner of ‘Viksit Bharat’ by 2047 while expressing her displeasure with the interim Union MSME Budget 2024 at the new Parliament building. This includes plans to boost trade and the economy, self-sufficiency strategies, and training for MSMEs.
Timely Funding
The government would supply timely and essential funding, appropriate technologies, and appropriate training.
The economic survey claims that the government’s reforms for the MSME sector—which employs more than 11 crore people—have aided smaller companies in growing even further and recovering from the pandemic’s effects.
Emergency Credit Line Guarantee Scheme
The Emergency Credit Line Guarantee Scheme (ECLGS), the addition of retail and wholesale trades as MSMEs, the updating of MSMEs’ definitions under Aatmanirbhar Bharat, the implementation of TReDS to address MSMEs’ late payments, and the extension of non-tax benefits for three years in the event of an upward change in MSME status are a few of these.
On-time Payments: Budget 2024 highlights
Including this survey, went on to say that by allowing a tax deduction for expenditures incurred on payments made to MSMEs only when the payment is received, the Union Budget for FY24 made it simpler for them to receive payments on time.
Information on MSMEs has been aggregated owing to the Udyam portal and the Udyam Assist Platform (UAP), with 2.24 crore MSMEs registered on the Udyam portal and about 1.2 crore units registered on the UAP.
The government has established the Emergency Finance-Linked Guarantee Scheme (ECLGS) to give large sums of finance to MSMEs. According to Sunil Desai, managing director of Richfield Engineering India Private Ltd and an analyst on MSME panels at various events, there are more pressing issues for MSMEs that must be addressed, but the government is not prioritizing them. There are many Govt schemes for MSMEs
MSMEs are penalized for late payments as soon as they miss a loan installment.
The issue is whether you want to close the MSME or enter the market and have the industry help them grow. He goes on to say that the budget and industry rule designers are unrelated to the growth of MSME’s.
According to Nilaya Varma, co-founder of Primus Partners, acknowledging the importance of MSME, competing globally in the green economy, and having a policy environment that takes MSME needs into account are all critical.
Varma said that without making its MSMEs competitive, India cannot compete globally and create the jobs it needs.
Key Highlights of Union Budget 2024 By Nirmala Sitharaman
Here are latest highlights of Union Budget 2024 given by Finance Minister:-
- For Ecommerce Businesses:- The tax deducted at source (TDS) for online shopping has been reduced from 1% to 0.1%.
- Angel tax is no longer applicable to any investors.
- The tax rate for foreign companies was lowered from 40% to 35%.
- The eligibility limit for Mudra Loans has been increased. Now, people who have taken and successfully repaid loans under the TARUN category can get up to Rs 20 lakh instead of the previous limit of Rs 10 lakh.
- To help small and medium-sized businesses get cash by converting their invoices into money, the requirement for big companies to join the TReDS platform has been lowered. Now, companies with a turnover of Rs 250 crore or more must join, instead of the previous Rs 500 crore. This change will add 22 more central public sector enterprises and 7000 more companies to the platform.
- Funds will be provided to establish 50 facilities for treating food with radiation to make it safer and 100 labs for testing food quality and safety.
Takeaways For MSMEs From Interim Budget 2024
Sitharaman presented her sixth consecutive budget, focusing on achieving ‘One Nation, One Market, and One Tax’ and the simplified business environment enabled by the Goods and Services Tax (GST). The interim budget 2024 allocated Rs 22,137.95 crores for MSMEs, including new clusters and technology hubs, for global competitiveness. Checkout how you can do GST registration.
The budget 2024 is critical for MSMEs that produce components. The government can help these businesses function as catalysts for technological advancement, job creation, and economic growth by implementing targeted measures and addressing their primary concerns.
Helping India’s MSMEs is not only economically necessary but also a calculated investment in the country’s future as it strives to establish itself as a global manufacturing hub.
FAQ
What is the budget for MSMEs in 2024?
The interim budget 2024 MSME highlights sets aside ₹22,137.95 crores for small and medium businesses (MSMEs). This money will be used to create new business groups and technology centers to help these businesses compete worldwide.
What is 45-Day MSME Payment Rule?
The MSME 45-day payment rule says that businesses must pay their small and medium-sized suppliers within 45 days. If they don’t pay within 45 days, they can’t deduct those expenses from their taxes. This rule is part of Section 43B(h) of the Income Tax Act.
Which areas got a boost from the 2024 Budget?
In the long run, main areas that are likely to benefit include infrastructure, renewable energy, aviation, railways, metros, power, and capital goods. These sectors are getting more government support through increased spending. Trading business is quite trending now days look some of the best trading business ideas that are performing well in 2024.
What is the budget for GST in 2024?
Interim Union Budget 2024: Goods and Services Tax (GST)
Budget 2024 Highlights:
- The number of businesses and individuals paying GST has doubled.
- After GST was introduced (from 2017-18 to 2022-23), the revenue from State GST (SGST) increased significantly, showing better performance compared to the period before GST (2012-13 to 2015-16).
- 94% of industry leaders think the move to GST was a good decision.
- GST has made supply chains more efficient.